With the drought unabated, John Howard has again dusted off the Akubra and gone bush. There, he’s heard from Australian farmers, calling for making drought assistance more generous, or making the income and wealth tests less restrictive. I’m comfortable with being more generous in assistance to farmers than we are to struggling small-business owners, since I think there’s a positive exernality for Australians in having a productive and diverse farming sector.

But the money, like HECS for university students, should come with the condition that it’s paid back when times are good. My ANU colleague Bruce Chapman has a paper showing how this could be done. It’s an idea that could also be applied in other contexts – such as assistance to low-income communities, and grants to elite athletes.